Risk, information and professional indemnity

Abstract

This paper explores professional indemnity (PI) cover for surveyors, particularly in the UK, over the last eight years. It looks at market trends, Royal Institution of Chartered Surveyors requirements and other possible approaches to insurance as a key risk management tool to help protect the finances and reputations of surveying companies, and the surveying profession more broadly. From the UK property and financial markets crash in 2008, to the Edinburgh Schools cases in 2016, to the tragedy at Grenfell Tower in 2017, to concerns about reinforced autoclaved aerated concrete first in the 1990s and again in 2019, the surveying profession has faced — and will always face — numerous challenges that potentially pose a threat to surveying companies’ finances and reputations. PI cover is a key risk management tool that helps to protect surveying companies from these threats, enabling them to continue to deliver crucial surveying services, including in areas of higher risk; it is also, of course, a benefit and comfort for surveyors’ clients. PI cover, however, is provided in the context of a market, which faces its own connected risks and challenges. Sometimes those risks and challenges even lead to partial or full market failure, requiring some form of intervention or correction. In the UK, PI is conventionally provided to surveying companies, covering claims made that are connected to their provision of surveying services. But other possible approaches exist, both in the UK and further afield, such as project insurance. The question to be explored is therefore which model of PI cover is more effective and more resilient, particularly in the face of industry challenges and potential market failures. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/ business/.